Indian student population in the United States has dropped for the second year running, going down to less than 100,000 even as the American education business continued to expand on the strength of growing interest from China, which now has 235,000 students in the US.

The 2013 Open Doors Report on International Educational Exchange released on Monday shows a 3.5 per cent decrease in student enrollment from India in 2012/2013 (on top a four per cent decline the previous year), bringing the Indian student count in the US to 96,754 after more than 15 years of growth that began reversing in 2011.

In contrast, China, which was displaced by India as the biggest source of foreign students for a few years at the turn of the century, has surged ahead. It registered a 21.4 per cent increase in 2012/2013 over the 194,000 Chinese students who were reported in US educational institutions the previous year.

Saudi Arabia with 45,000 students arising from a 30 per cent increase over the previous year is the other big driver of the seven per cent overall growth of foreign students in the US — now numbering nearly 820,000. Foreign students account for little less than four per cent of the 21 million students enrolled in US higher education.

While strong growth in student inflows from countries such as Saudi Arabia, Brazil, and Kuwait is attributed to increased government funding, particularly at the undergraduate level, the Indian interest appears to be tailing off due to several reasons: Among them, the big rupee depreciation (it has dropped nearly some 25 per cent against the US dollar in the past two years); alternative options in Canada, Australia, U.K, and Europe; and improvements in the Indian academic system itself.

Still, students from the top three places of origin — China, India, and South Korea (whose numbers also declined) — now represent nearly 50 per cent of the total number of international students in the United States. After these top three countries, no country represents more than 5 per cent of the total.

International students contribute more than $24 billion to the US economy, according to the US. Department of Commerce. Open Doors 2013 reports that about 72% per cent of all international students receive the majority of their funds from sources outside of the United States, including personal and family sources as well as assistance from their home country governments or universities.

This 2012/13 data marks the seventh consecutive year that Open Doors reported expansion in the total number of international students in US. higher education. There are now 40 per cent more international students studying at US. colleges and universities than a decade ago, and the rate of increase has risen steadily for the past three years, despite the reversal from India, which is one of the big markets for US educational institutions. For the first time, there are more foreign students at the undergraduate level than in masters/grad school.

Data from the report shows that Indian students continue to show a preference for STEM subjects. Engineering (35 per cent) and Math/Computer sciences (23.1 per cent) accounted for nearly 60 per cent of the 96,754 students from India enrolled in US academic institutions. Business management (13.7 per cent) and physical/life sciences (11.1 per cent) are the other favored subjects. Only 3.5 per cent are here to study social sciences and only 0.5 per cent study humanities

In terms of states, California hosted more than 100,000 international students for the second year in a row, followed by New York, Texas, Massachusetts and Illinois. In terms of metropolitan areas, New York City is once again the top place for international students, with a six per cent increase. Six of the top 20 metropolitan areas had increases this year of more than 10 per cent: Boston, Dallas, Seattle, San Diego, Pittsburgh, and Baltimore.

At the institutional level, the University of Southern California hosts the largest number of international students for the 12th year, followed by University of Illinois at Urbana-Champaign, Purdue University, New York University, and Columbia University.